The last-minute clause attached to the draft bill, is an attempt to appease trade unions and other detractors of the new coal law, who fear that unrestricted entry of the private sector in coal mining would bring back the unsafe work conditions prevalent before the mines were nationalised. The new proviso in the bill will enable the union government to decide the size and location of coal reserves being offered to private sector investors, instead of an independent authority.

The union cabinet, which gave its nod to the final phase of liberalisation of the coal industry in February last year (subject to legislative approval) had originally intended an independent authority, probably comprising experts, to monitor the explorationof coal and lignite resources. The new rider will allow the coal ministry to decide where exploration should take place instead.

That way the ministry could keep investors away from areas where unscientific mining practices have been in vogue, like the Dhanbad-Raniganj coal belt, for instance. Inter-ministerial consultations on the draft Bill have commenced already and the paper is expected to be put up to the Union Cabinet soon.

The first dose of liberalisation came in 1994, when the Centre amended the Coal Mines (Nationalisation) Act of 1973, to allow the private sector to acquire captive coal mines for power, steel and cement plants. A phased decontrol of the pricing and distribution of coal followed.

In April 1995, the Planning Commission set up a committee to draw up an ``integrated coal policy.'' The recommendations of that committee were the basis of the second tranche of liberalisation of the coal industry approved by the Union Cabinet in February last year.

Coking coal and superior (readdearer) grades of non-coking coal were taken off the administered price hook early in 1996. Last year, the Centre decontrolled the pricing and distribution of the ``D'' grade of coal, which is primarily consumed by power plants.

Coal companies were also allowed to revise prices of all other grades of coal every six months, provided they adhered to the Bureau of Industrial Costs and Prices (BICP) devised formula. The formula has so long guided the administered pricing of coal.

The Union Cabinet also decided to abandon the captive rider attached to private sector participation in coal mining and decided to invite private sector investment in coal exploration as well. The bold reversal of the coal policy adapted in 1973 (when coal mines were nationalised) requires an amendment of the Coal Mines (Nationalisation) Act.

The enabling legislation will pave the way for the Coal Mines (Regulation and Development) Bill, containing new laws for a deregulated industry, in which the public sector and the privatesector would have to compete on equal terms for coal-bearing property. Coal trade unions, which harbour bitter memories of unscientific mining practices and unsafe work conditions before coal mines were nationalised, have vehemently resisted the second Bill as well. Even as the enabling legislation is being readied for the winter session, the fate of the new tenets drawn up for a coal policy, the Coal Mines (Regulation and Development) Bill, is uncertain yet.